Altman Appears to be Close to Resigning : Whitewater: Deputy Treasury secretary apparently met with his boss to discuss leaving. He no longer has the support of key Senate Democrats.

Deputy Treasury Secretary Roger Altman, facing unrelenting congressional criticism after his testimony at recent Whitewater hearings, has met privately with Treasury Secretary Lloyd Bentsen to discuss his resignation, Administration sources said Friday night.

Bentsen has told Altman that the decision on whether to resign is his to make, the sources said, but they suggested that Altman’s departure now seems all but certain. Administration officials said they doubt that Altman will quit over the weekend, however.

Altman was the central Administration witness in the Whitewater hearings before Senate and House panels and he has been heavily criticized by both Republican and Democratic senators. He was quizzed at the hearings about allegations that he provided confidential information at a crucial time to the White House about the status of a Resolution Trust Corp. investigation of the failed Madison Guaranty Savings & Loan. The Arkansas thrift was owned by a business partner of President Clinton and his wife, Hillary Rodham Clinton, when Clinton served as governor of Arkansas.

In the wake of the hearings, two leading Democrats on the Senate Banking, Housing and Urban Affairs Committee--which conducted the Senate hearings--have met privately with Bentsen and outgoing White House Counsel Lloyd N. Cutler to discuss Altman, sources said Friday.

The lawmakers did not demand Altman’s resignation, the sources said, but their discussions about his future apparently sent a subtle message to the White House and Treasury that Altman should consider leaving.

Republican senators on the Whitewater panel publicly have called for Altman’s resignation. Treasury officials had thought that Altman could survive GOP attacks but that it would be nearly impossible without the support of senior Democrats on the key committee that deals with Treasury on many legislative matters.

As a result, the message conveyed to Cutler and Bentsen by Banking Committee Chairman Donald W. Riegle Jr. (D-Mich.) and Sen. Paul S. Sarbanes (D-Md.), who is likely to assume the chairmanship next year, virtually ends Altman’s chances to stay at Treasury.

In another Whitewater-related action Friday, the chairman of the Senate subcommittee that oversees the independent counsel law called for the appellate court panel that appointed new Whitewater counsel Kenneth W. Starr to rule on whether Starr’s past Republican activities are grounds for his withdrawal.

With Democratic anger over Starr’s appointment continuing to rise, Sen. Carl Levin (D-Mich.) wrote Judge David B. Sentelle, presiding judge of the independent counsel division of the U.S. Court of Appeals here, to complain that Starr’s appointment “puts at risk the historical public acceptance of the independent counsel process.” Starr “lacks the necessary appearance of independence essential for public confidence,” the letter said.

Levin, chairman of the Senate Governmental Affairs subcommittee that handled the newly enacted independent counsel law, said “the same standard should apply to Mr. Starr” that Republicans applied to former special counsel Robert B. Fiske Jr. when they expressed concerns that he was not independent.

Starr was named by Sentelle’s panel Aug. 5 under the new law, which was signed by President Clinton on June 30. Fiske, who had been in charge of a six-month Whitewater investigation, was named by Atty. Gen. Janet Reno under pressure from Republicans after the previous law expired.

White House officials have been careful not to join in public attacks on Starr and even distanced the President from critical statements about Starr made by Clinton’s personal attorney, Robert S. Bennett.

As independent counsel, Starr will investigate whether Clinton benefited from money funneled to Whitewater Development Corp. from Madison Guaranty, which was owned by James B. McDougal, his investment partner in the Whitewater real estate venture.

Congressional Democrats and other Clinton supporters have charged that Starr cannot be impartial and objective in his investigation because of his interest in a Republican political career and his earlier interest in intervening in a sexual harassment suit filed by Paula Corbin Jones, a former Arkansas state employee, against Clinton.

Before his appointment, Starr reportedly considered filing a brief in the sexual harassment suit to argue against the President’s claim of immunity. He also reportedly considered a run for the Republican nomination for U.S. Senate from Virginia.

“We have finally uncovered a real case of political interference in the Whitewater investigation: the actions by partisan Republicans who successfully demanded that Robert B. Fiske Jr. be removed as independent prosecutor,” complained a statement released Friday by the Back to Business Committee, an ad hoc group of Democratic politicians with close ties to the White House.

Sentelle, a conservative North Carolinian and an appointee of President Ronald Reagan, confirmed Friday that he had met with conservative Republican senators in July, during the time that his panel was selecting a new Whitewater special prosecutor.

Sen. Lauch Faircloth (R-N.C.) also confirmed that he and Sen. Jesse Helms (R-N.C.) had lunch with Sentelle on July 14, but both Sentelle and Faircloth denied that they discussed any issues related to a new independent counsel.